UK to Pull Out of Controversial Energy Treaty as Talks Falter

(Bloomberg) -- The UK will pull out of a controversial post-Cold War energy treaty after talks to bring the accord in line with the country’s climate goals stalled. 

Britain’s decision to leave the Energy Charter Treaty follows similar moves by other European countries in recent years. Originally intended to entice the West’s oil-and-gas industry to invest in former Soviet states, concerns mounted that it clashes with international climate goals and can leave signatory nations at risk of lawsuits from fossil-fuel companies over policies to cut emissions.

What is the Energy Charter Treaty and Why Do Countries Want to Leave It?

The UK’s exit underscores years of wrangling to try and modernize the treaty for an era in which Europe’s biggest economies have put the green transition at the center of their energy policy. Britain reached an initial deal to update the agreement in 2022, which would have expanded support to technologies like renewable energy and carbon capture. But with elections upcoming in Europe, any further negotiations could drag on indefinitely, the UK said. 

“The Energy Charter Treaty is outdated and in urgent need of reform, but talks have stalled and sensible renewal looks increasingly unlikely,” Energy Minister Graham Stuart said in a statement. “Remaining a member would not support our transition to cleaner, cheaper energy, and could even penalize us for our world-leading efforts to deliver net zero.”

British ministers will now start the withdrawal process, which will take effect after one year. 

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